The major objective of the research program was to investigate auditory masking in listeners with hearing loss due to cochlear (sensorineural) pathology. The abnormally prominent upward spread of masking observed with listeners having sensorineural hearing damage not only provides insight into the nature of the underlying pathology, but also serves as a partial explanation of why impaired listeners report experiencing great difficulty understanding speech in the presence of competing background noise. These masking results have been incorporated into an audiological test for predicting the speech perception handicap in noise. In an expansion of the scope of the grant, an applied program directed toward development of a new approach to hearing prosthesis has been initiated. In this effort, a prototype for a close-talking detachable-microphone hearing aid, utilizing infra-red light transmission of the acoustical signal, has been assembled. Initial audiological evaluation of the device indicates that it is far superior to the personal hearing aid currently in use by many listeners.